www.iva.co.uk

can a student loan be
included in an iva

Hello

A student loan can be included in an IVA, however the Student Loans Company have specific dividend criteria (i.e. they need a minimum dividend of (currently) 40p/£) in order to accept and IVA proposal.

A Student Loan is not provable in bankruptcy - this means if you were made bankrupt the Student Loans Company would not be able to submit a claim and you would still be liable for the loan after you were made bankrupt.

This is why they have strict criteria for accepting IVAs.

If you speak to an insolvency practitioner they will be able to advise you on the basis of your individual circumstances. If the Student Loans Company are not a large creditor then their vote may not affect the outcome at the creditors meeting - you could get the IVA approved even if they reject, but if they are one of your main creditors then their vote would count and you would therefore need to meet their requirements.

Hope this helps

AccumaGroup - A large insolvency practitioner service based in Manchester.
www.accumagroup.com

To follow on from Accuma Groups' post. If a Student Loan was taken from 1998 onwards then it is likely to be an Income Contingent Loan which CAN NOT be included in an IVA. This loan will have to be paid outside of the IVA and a budget for this must be included. Repayments for this loan are taken out directly by the Inland Revenue from your salary and payments only begin once you are earning more than £15,000 per year.



Best Regards
Oliver

Thomas Charles Ltd: Experts in all things IVA
www.thomascharles.com

I had a case recently where Student Loans were already collecting payments directly from my client's salary and stated at the creditors meeting that they wished to be left outside of the arrangement to continue to collect in this manner.

The actual effect of this was that they actually got less money over the period of the IVA than if they had received a dividend, but the downside being that my client has to continue to pay his instalments at the end of the arrangement until the debt is paid in full.

Whilst this is putting Student Loans in a preferred position, I obtained the agreement of all other creditors to their ommission, and my client has no problem in continuing with the loan repayments as they are only £20 per month.

OK - it may not strictly be by the text book, but let's not forget that IVA's are a contractual document and so long as all parties agree anything is generally possible with some forethought and flexibility on the part of the insolvency practitioner.

Regards, Melanie Giles, Insolvency Practitioner for 20 years.

I had a case recently where Student Loans were already collecting payments directly from my client's salary and stated at the creditors meeting that they wished to be left outside of the arrangement to continue to collect in this manner.

The actual effect of this was that they actually got less money over the period of the IVA than if they had received a dividend, but the downside being that my client has to continue to pay his instalments at the end of the arrangement until the debt is paid in full.

Whilst this is putting Student Loans in a preferred position, I obtained the agreement of all other creditors to their ommission, and my client has no problem in continuing with the loan repayments as they are only £20 per month.

OK - it may not strictly be by the text book, but let's not forget that IVA's are a contractual document and so long as all parties agree anything is generally possible with some forethought and flexibility on the part of the insolvency practitioner.

Regards, Melanie Giles, Insolvency Practitioner for 20 years.